The Spirit of Capitalism and International Risk Sharing

We show that a model of the spirit of capitalism can generate a high degree of international risk sharing as measured by the discount-factor-based approach of Brandt, Cochrane, and Santa-Clara (2001), even when consumption and portfolio holdings exhibit "home bias". We also show how portfolio externalities can arise in the model, and highlight the caution that one needs in interpreting discount-factor-based measures of international risk sharing: in the presence of portfolio externalities, even when the measured degree of risk sharing is perfect, it is still possible for government policies to induce investors to hold better-diversified portfolios and attain higher welfareThe spirit of capitalism; International risk sharing; Discount factor; Portfolio externality.

Sudden Stops and Liability Dollarization: Evidence from East Asian Financial Intermediaries

Before the currency crisis of 1997-1998, East Asian financial intermediaries borrowed heavily in international markets. During the crisis, the intermediaries’ stock market value declined sharply, and a sizable fraction of the institutions were closed or nationalized. We find that 1) the stocks of intermediaries with large international debt exposure performed poorly during the crisis; 2) more short-term international debt outstanding was associated with a higher probability of bankruptcy; 3) among those intermediaries that survived, more long-term international debt was associated with a lower equity return; and 4) higher international debt, especially short-term international debt, was associated with a more severe contraction in the assets and liabilities of the intermediaries. This evidence supports the “sudden stop†and “liability dollarization†theories of emerging market financial crises. It indicates that both the sudden withdrawal of funds by international creditors and the foreign currency nature of international debt damage the financial system, and exacerbate the decline in the financing of investment.Stops, Liability Dollarization, Financial Intermediaries, Asian Financial Crisis.

Information asymmetry, trading volume and returns in the Malaysian stock market

This paper examines investors’ motive to trade on the Malaysian stock market from 1st July 1997 to 30th June 2005. By applying ordinary least square (OLS) to 272 stocks as well as in three size groups, both the time series and cross-sectional results indicate that speculation on firm specific asymmetric information is the primary motive to trade on Malaysian stock market for the full and two sub-sample periods. The results show that most of the investors in Malaysian stock market tend to speculate firm related information to maximize their profits. The findings of this study provide important implications to policy makers in addition to investors in this developing market. Proper management of foreign portfolio investment is crucial to prevent manipulative moves and excessive speculative forms of portfolio investments that may cause excessive surges of inflows and massive panic outflows of short-term capital and thus collapse the financial system and downturn economy

Subsampling-Based Tests of Stock-Return Predictability

We develop subsampling-based tests of stock-return predictability and apply them to U.S. data. These tests allow for multiple predictor variables with local-to-unit roots. By contrast, previous methods that model the predictor variables as nearly integrated are only applicable to univariate predictive regressions. Simulation results demonstrate that our subsampling-based tests have desirable size and power properties. Using stock-market valuation ratios and the risk-free rate as predictors, our univariate tests show that the evidence of predictability is more concentrated in the 1926-1994 subperiod. In bivariate tests, we find support for predictability in the full sample period 1926-2004 and the 1952-2004 subperiod as well. For the subperiod 1952-2004, we also consider a number of consumption-based variables as predictors for stock returns and find that they tend to perform better than the dividend-price ratio. Among the variables we consider, the predictive power of the consumption-wealth ratio proposed by Lettau and Ludvigson (2001a, 2001b) seems to be the most robust. Among variables based on habit persistence, Campbell and Cochrane's (1999) nonlinear specication tends to outperform a more traditional, linear specification.Subsampling, local-to-unit roots, predictive regression, stock-return predictability, consumption-based models

Some assembly required: assembly bias in massive dark matter halos

We study halo assembly bias for cluster-sized halos. Previous work has found little evidence for correlations between large-scale bias and halo mass assembly history for simulated cluster-sized halos, in contrast to the significant correlation found between bias and concentration for halos of this mass. This difference in behavior is surprising, given that both concentration and assembly history are closely related to the same properties of the linear-density peaks that collapse to form halos. Using publicly available simulations, we show that significant assembly bias is indeed found in the most massive halos with $M\sim 10^{15}M_\odot$, using essentially any definition of halo age. For lower halo masses $M\sim 10^{14}M_\odot$, no correlation is found between bias and the commonly used age indicator $a_{0.5}$, the half-mass time. We show that this is a mere accident, and that significant assembly bias exists for other definitions of halo age, including those based on the time when the halo progenitor acquires some fraction $f$ of the ultimate mass at $z=0$. For halos with $M_{\rm vir}\sim 10^{14}M_\odot$, the sense of assembly bias changes sign at $f=0.5$. We explore the origin of this behavior, and argue that it arises because standard definitions of halo mass in halo finders do not correspond to the collapsed, virialized mass that appears in the spherical collapse model used to predict large-scale clustering. Because bias depends strongly on halo mass, these errors in mass definition can masquerade as or even obscure the assembly bias that is physically present. More physically motivated halo definitions using splashback should be free of this particular defect of standard halo finders.Comment: 7 pages, 4 figures, to be submitted to JCA

Incentives to Dual Practice New Institutional Economic analysis of Canada’s mixed public-private health sector

There are many incentives for physicians to dual practice such as an increase in salary, technology usage, or less work hours. By using the New Institutional Economic approach, we examine these incentives of physicians in Canada\u27s health care system in three scenarios of dual practice. In the first scenario is physicians dual practicing without any government policies or restrictions in the private sector. In the second scenario, physicians are not to allow to dual practice, meaning a full out ban of dual practicing. In the third and final tier, restrictions or government policies will be place in the private sector while still allowing physicians to dual practice. This paper analyzes which of the three scenarios best benefit social welfare in Canada\u27s health care system by examining the incentives of physicians to dual practice

Interracial Dating: Examining Race Preference Attitude in Hmong Adults

While past research on Asians in interracial dating has found that Asians are more likely to engage in interracial relationships with White individuals, there is little information known regarding specific Asian ethnicities. More so, there is even less information regarding Hmong in interracial dating. To better understand Hmong in interracial dating, this study examined Hmong adults’ openness to interracial dating and whether race preference exists. Participants were asked to complete a survey pertaining to their attitudes toward interracial dating with specific racial groups as well as level of acculturation. Results revealed Hmong adults are open to interracial dating across all four racial groups. However, Hmong adults’ perception of their parents’ attitudes differs. Limitations and future research along with implications are discussed